We all agree that the best way to create wealth is to invest; it is a common secret that this really is how you become wealthy. So the next question should be where can your money earn the most and offer the least risk?
In our opinion, one investment stands head and shoulders above the rest and that is PROPERTY.
Property investing is subject to timing. There are times when investing in property may not be the wisest investment, so one has to be careful about WHEN to invest. Right now seems to be a great time to buy property and it seems as if opportunity will be present for approximately another decade and possibly even longer.
Combining the fact that Britain voted to leave the European Union, which created massive uncertainty over how the country is going to fare politically and economically, alongside changes to Stamp Duty tax rates in April this year; it seems that the perfect storm is brewing for dampened house prices. All the signs are there.
Brexit has put a hold on property prices because it is causing more Brits to pause home buying, in case they need their cash in the event of an economic downturn. Foreign investors are also holding off investment purchases until they know what is really going on.
In the UK at least seven investment firms suspended trading in their property funds last week freezing £15 billion ($19.4 billion) of assets since last Monday, because they are worried about how the housing market in Britain is going to go post-Brexit.
Here are the nine important reasons why we think that deciding to invest in property in London NOW may be the right time.
1. Interest rates are incredibly low.
The “Brexit” shock that just rocked the world and caused financial markets to tumble is not bad news for everybody. There is one segment of investors who will benefit from it: those with money tied up in real estate. Why? Three words: Lower Interest rates. Low interest rates lead to low monthly payments/instalments, which is great for real estate investors looking to maximize their profits.
Interest rates, which have been at historically low levels for almost a decade now, have been slowly climbing over the past year, and until recently, most analysts believed that a series of rate hikes from the Bank of England was coming soon. But, with uncertainty in the markets, the opposite has happened: Interest rates have dropped. According to a recent article, “The probability of a Bank of England interest rate rise at the Bank’s next meeting has collapsed to 0 percent, and traders are assigning a less than 8 percent chance of a rate increase at all this year.”
Several years from now, we’ll look back and say, “Remember back in 2016 when you could get a mortgage under 3 percent? Those were the days!”
2. Banks are lending once again.
In the collapse of the real estate market in 2007 and 2008, many banks tightened their lending standards to such a degree that obtaining a mortgage became almost impossible for many people. However, gradually over the past several years, banks have once again begun opening their doors and relaxing their criteria.
This does not signify that one will be able to obtain a 125 percent loan-to-value mortgage with no money down based only on “your signature,” as some may have done during the mid-2000s, but if one has a job and a decent credit, obtaining a fixed-rate loan is more than possible.
3. Choosing the right property at the right price
Investing in property is usually about capital growth, so choosing a property that is more likely to increase in value is the most important decision you will make; therefore, buying at the right price is absolutely critical.
In the property market you get the opportunity to acquire an asset below its real market value if you are patient and knowledgeable. The key for you is to do your research, work out what everything is selling for in and around the area and then you’ll discover that soon you’ll become very good at working out what a property is worth – you’ll know a bargain when you see it. Never consider purchasing real estate in an area that you are unfamiliar with. If you do find a property that you like and are unsure of its real value we’d suggest contacting our team so that we can arrange for an independent valuation to be done on your behalf, which can also be used for a bank or a financial organisation.
Ensuring that you have a steady rental income stream is also vital because this cash flow will make the holding of the asset more affordable and provide necessary income.
Different types of residential property – home units, houses and land – can outperform each other over time. For example, vacant land will provide no rental income but may appreciate more quickly if purchased in an area with limited supply. Maintenance should also be considered over the long term. Some areas offer higher rental yields, but it is important that you do your homework as often these properties provide lower capital growth opportunities.
It is also important that your property suits the demographics of tenants in the area. For example, if it is near a university more bedrooms will be in greater demand than a big back garden for kids to run around. A family home that is close to schools and parks on a quiet street will be more desirable than a property on a busy road.
4. Stamp Duty
Stamp duty is a tax placed on buyers when they purchase a property in the UK. It is payable upon completion of the property transaction and is additional to the property price. The Stamp Duty tax change in April this year has already resulted in fewer people buying properties and therefore putting another ‘hold’ on UK property prices.
Stamp Duty changes are already cooling prices.
5. Prices are reasonable.
Yes, real estate prices have climbed significantly from their 2010 and 2011 lows, especially during 2014 and 2015 when the property market restarted again. However, these days, it is possible to hustle to find great deals, and great deals CAN be found. This is especially true for investors who buy UK properties at BMV prices through ‘connections’ with banks/financial organisations accountants etc.
6. Technology has made investing significantly easier.
In the “Golden days,” investing in real estate took a significant amount of driving around, talking to people, waiting, looking at hundreds of pages of documents and other difficult, time-consuming tasks.
Today though, technology has made investing in real estate significantly easier. For example:
Advertising properties is as simple as posting them onto the internet.
Screening tenants can be done online through a number of screening services.
Handyman and cleaning services can be ordered online.
Tenants can pay rent online rather than in person.
Your agent can set you up with automated email alerts for new listings.
You can take virtual tours of neighbourhoods using Google Street View.
You can invest in real estate passively through finance/investment websites.
And so much more. Today, a property investor barely needs to leave the comfort of home to manage a portfolio of rental properties, thanks to technology.
7. Knowledge is free.
In the past, real estate knowledge was primarily taught by “get-rich-quick” gurus who travelled the country charging outrageous fees (up to £70,000) for “secret knowledge.” While this practice is still common, the internet has democratized learning in a way that makes real estate investing education completely free.
There are thousands of blog posts, e-books, podcasts, webinars, forums and more sources that help property investors connect. Millions of new and experienced investors come to our platform monthly to learn and grow as investors — for free.
8. Your job is unstable.
While you might think you have a stable job, job security worldwide is not what it once was. Employers are all too happy to let go of hundreds or thousands of employees just so the price-per-share might increase a few percentage points. Efficiency is the name of the game, and your job might be on the chopping block.
Today, the best job security is enjoyed by those who take an active interest in gaining skills and knowledge that can be used elsewhere. Real estate investing is one of the greatest ways to gain financial independence so your job can become optional rather than required.
9. Ten years from now you’ll wish you had started today
Finally, let’s talk about the big one: Investing takes time. We’re not promising that tomorrow you will be rich if you start investing in real estate today. But what we are telling you is that, in ten years from now you will likely look back to 2016 and say, “Why didn’t I start back then?”
As previously noted, we are now at a unique point in history where real estate investing just makes sense. Wait too long and you’ll miss out.
Of course, we are not saying that ANY property is going to make sense and will appreciate in value or achieve your targets. You still need to understand what you are doing. You still need to do the maths correctly. You still need to hustle to find the 1-in-100 deals that actually make sense and are truly BMV investments.
If you are keen to build you own PROPERTY PORTFOLIO, connect with the Emblem team and benefit from our expertise by calling +357 25 871616 or email admin1@embleminvestments.co.uk, so that we can review your personal circumstances and create a strategic plan of action.
If you are keen to build you own PROPERTY PORTFOLIO, connect with the Emblem team and benefit from our expertise by calling +357 25 871616 or email admin1@embleminvestments.co.uk, so that we can review your personal circumstances and create a strategic plan of action.
